I think the issue you're having is because you're sticking to guidelines as laws on one side, and you're misunderstanding things a little bit (I admit Google Material is not clear about this, it's more like inference after viewing, studying and working on lots of Material design apps). A clue is given on the same page you're linking:
A system icon, or UI icon, symbolizes a command, file, device, or
directory. System icons are also used to represent common actions like
trash, print, and save.
The design of system icons is simple, modern, friendly, and sometimes
quirky. Each icon is reduced to its minimal form, with every idea
edited to its essence. The designs ensure readability and clarity even
at small sizes.
As you can see, Material Design only considers System Icons (which your flags are not).
So this leaves us with the question: what to do then?
For small illustrations with details (like flags), you should take a look to UI Integration chapter and scroll to Thumbnails and Avatars. From that page:
Avatars and thumbnails represent entities or content, either literally
through photography or conceptually through illustration. Generally,
they are tap targets that lead to a primary view of the entity or
Avatars can be used to represent people. For personal avatars, offer
personalization options. As users may choose not to personalize an
avatar, provide delightful defaults. When used with a specific logo,
avatars can also be used to represent brand.
Thumbnails allude to more information—letting the user peek into
content—and assist navigation. Thumbnails let you include imagery in
See? We got out of System Icons and dive straight into entities or taxonomies (which your flags actually stand for!)
See an example below:
it's easy to see you can replace those avatars with flags.
Now see the recommended metrics on the above elements:
As you can see by the metrics the avatar is 40dp
(72-16-16), which is bigger than 24dp, and even bigger than 32!
To answer your specific question: not at all, but be careful because Material Design elements are quite unorganized so you need to read everything to find out which element to use on every case (in your case, avatars or thumbnails)